The Role of Supply Chain Complexity for Implementing Global Risk Management Strategies

Global operating companies are exposed to risks along their entire supply chain. Risks can arise from different parts of the supply chain and have the potential to severely impact supply chain performance. That is why it is important for companies to implement supply chain risk management. When doing so, one important aspect to consider is to implement appropriate risk management strategies, such as postponement, speculation, and hedging, to handle different types of risks (e.g. supply risks, demand risks, and operational risks) to decrease the potential negative effects of supply chain risks on supply chain outcomes. For the deployment of appropriate risk management strategies several factors play a key role and furthermore increase or decrease (=moderating effect) the relationship between the selection of risk management strategies and supply chain outcomes. One such moderator is supply chain complexity as it infl uences confusion about ownership of inventory, bullwhip effect, and inertia. The purpose of this study is to propose the moderating effect of supply chain complexity components, such as upstream supply chain complexity, downstream supply chain complexity, and manufacturing supply chain complexity on the relationship between risk management strategies and selected supply chain outcomes. The study is based on an extensive literature review. The goal of the literature review is to develop propositions on the relationship between risk management strategies and supply chain outcomes and the moderating effect of supply chain complexity. One theoretical contribution is to reveal the relationships between the constructs mentioned above, which is a basis for future testing them (e.g., conducting a quantitative survey). A managerial contribution is to assist managers on designing supply chains (e.g., structure of the supply chain) in accordance to their selected risk management strategy